Zambia and Zimbabwe have signed a memorandum of understanding to jointly construct a 1 650-megawatt Batoka hydro-power project which is estimated to cost in excess of $4 billion.
Zambia Energy and Water Development minister Christopher Yaluma confirmed the development in Lusaka yesterday, saying the agreement was signed during the Council of Ministers which was held at Kariba in Siavonga last weekend.
Energy and Power Development minister Elton Mangoma last week travelled to Zambia to meet Yaluma over the deal.
However, Yaluma said the construction of the hydro-power station is subject to Zimbabwe paying an estimated $70 million debt it owes Zambia for the sale of the Central African Power Corporation assets which were jointly owned by the two countries.
He said the two countries had agreed in principle and were now going into capital sourcing.
The Zambian minister said the government was already in talks with possible funders to bankroll the project.
This means that Zimbabwe will have to pay off the debt without defaulting and this is expected to be paid within a period of three years, Yaluma said.
Plans for the project were initially mooted in 1993, but the Zambian government was reluctant because of the outstanding debt it wanted Zimbabwe to clear first.
The proposed Batoka power project site is located below the Victoria Falls on the Zambezi River and once completed would boost power supply to the two countries.
Yaluma said the Zambian government had mandated Zambezi River Authority and Zimbabwe Electricity Supply Company to commence conducting a feasibility study.
He said the project was expected to commence soon when all logistics were in place.
The meeting was attended by the Attorney-General and Finance and Energy ministers from both Zambia and Zimbabwe.
Mangoma last week told the Zimbabwe Independent Dialogue series in Harare that the much-awaited Batoka project would finally take off.
He said Zimbabwe had undertaken to pay the $70 million it owes Zambia dating back to the days of the Federation when the two countries jointly embarked on the Kariba hydro-electric project.
We will now identify an independent power producer to do a BOT (build, operate and transfer) on Batoka. We have not yet agreed on the (full) concession, Mangoma disclosed.
The project is expected to go a long way in easing the countrys electricity challenges.